Landmark Judgement

In a landmark judgement, the Supreme Court of India has impacted thousands of people perusing Cases under Section

138 of the Negotiable Instruments Act which lays down prosecution for Cheque Bounce for Insufficient Funds.

As per the recent judgement the case for the the above has to be initiated at the at the location where the branch of the bank is located from where the cheque was issued.

Hence if say, Mr Martin from Mumbai was issued a cheque by Mrs Wilsonr through her bank in Kolkata and the cheque bounces due to insufficient funds, then to recover the money Mr Martin will need to file a suit in Kolkata and he cannot file a suit in Mumbai.

In all practicality the recovery of funds will become more difficult. Moreover this ruling is of retrospective effect. Now laks of pending cases across the country will witness an inter-state and jurisdiction transfers. A little respite for cases where recording of evidences post summons have started will not be required to be transferred.